Westpac: RBA And RBNZ Ponder Negative Rates

Westpac note that "AUD/NZD has recovered strongly from March lows...
Both currencies are sensitive to global risk appetite/growth prospects,
but AUD has stronger insulation from sentiment swings, backed by
Australia's historically large trade & C/A surpluses. China's industry-
driven econ rebound supports AUD outperformance. Relative commodity
prices have pointed to higher AUD/NZD for some time, supporting our
end-'20 forecast of NZ$1.11. The monetary policy outlook is also tilting
back towards AUD. The RBA may be concerned about Victoria's return to
lockdown but has been clearer about which policies it does not like i.e. -
ve interest rates & FX intervention. The RBNZ in contrast is taking limited
comfort from NZ's domestic rebound, with its open econ facing huge
headwinds from the global pandemic. We expect further easing, with the
door remaining open to a negative OCR in 2021. This divergence should
help AUD/NZD find demand on dips with initial scope for NZ$1.0860
multi-week & higher again in Q4."